A)What Is the Equation of the Least Squares C)What

question 2

Essay

a)What is the equation of the least squares c)What is the value of the correlation coefficient? Interpret this value. d)What is the value of the coefficient of determination? Give an interpretation of this value.

---

Definitions:

Diminishing Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other variables remain at a constant.

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the average cost of production excluding fixed costs.

Average Total Cost

The sum of all production costs divided by the quantity of output produced, representing the cost per unit of output including both fixed and variable costs.

Marginal Cost

The additional financial cost due to the creation of an extra product or service unit.